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Sympathy for Wigan’s plight

As we totter on the edge of administration ourselves we should have every sympathy for Wigan’s fans and players after the Latics became the first professional club in England to fall into administration during the Covid-19 crisis.

It looks to me like another case of a murky and obscure flipping of control of a football club. Our friends at the EFL look culpable again after approving the takeover just last month by an entity called New Leader Fund (NLF) from a Hong Kong operation called International Entertainment Corporation (IEC), a Cayman Islands-registered company which owns a hotel and casino in the Philippines.

Yesterday the new majority owner Wai Kay Au Yeung called in the administrators which means that Wigan who have been a fantastic run of form pre and post lockdown will take a 12-point penalty, which automatically applies to any insolvency event. A decision is then taken at the end of the season whether it will apply this season or next. Such penalties are applied in a following season only if a club is already relegated.

Honestly makes me shudder and you know Wigan won’t be the last club, whilst many others hide behind some clever financial accounting.

A penny for David Whelan’s thoughts.

5 Comments Post a comment
  1. Shadow Play #

    Yep, there but for grace of ceiling cat go Charlton, and I suspect a lot of other clubs.It looks likely that the 12 point deduction will kick in this season meaning Wigan are effectively bottom of the Championship with 38 points, but they have a much better goal difference than their peers. The last few matches will be even more interesting and Luton and Barnsley who were almost down and out now have something to aim for.

    There have been some murky deals with ownership of grounds being inflated on book values and other accountacy tricks (see Sheff Weds for example). The deeper issue that no one seems to want to address is the financial unsustainability of many clubs outside the EPL. In order to compete in the Championship you either have to be very lucky or skilled in player recruitment (or a bit of both) or more likely be prepared to taken on massive amounts of debt and fiddle around with the spending regulations. Then you have to compete against relegated prem teams with parachute payments and not all of those bounce back meaning there are around five/six teams benefitting from large cash handouts.

    July 2, 2020
    • Spot on Shadow. Derby’s ability to pay Wayne Rooney has always intrigued me.

      July 2, 2020
      • Shadow Play #

        FFP regs for Championship clubs mean that you can sustain a total £39m loss over three seasons without incurring any penalties – so (obviously) that’s £13m a season, that’s still a huge chunk of revenue in anyone’s language. In Derby’s case they had a rolling debt well below the £39m threshold, but only because they sold, well transferred Pride Park for £81.1m to the club’s owners which conveniently allowed them to both conveniently wipe out a loss that would have taken them well over the £39m mark and pay some of Wayne Rooney wages. Allegedly he’s on £100k a week at Derby with some/much of the money coming from a gambling firm.

        July 2, 2020

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